SHANGHAI (Reuters) - The chief of BHP Billiton Ltd <BHP.AX>
called on the offices of China's top steelmaker on Wednesday as
BHP presses its case for a takeover of rival Rio Tinto Ltd/Plc
<RIO.L> amid a mounting chorus of opposition to the merger from
its customers.

Representatives at Baoshan Iron and Steel Co (Baosteel)
<600019.SS>, the listed unit of China's largest steel maker,
declined to comment on BHP <BLT.L> Chief Executive Marius
Kloppers' discussions at Baosteel headquarters in Shanghai, and
prevented reporters from approaching him for comments as he
left the building.

A Beijing-based spokesman for BHP, the world's biggest
mining group, also declined to comment.

ADVERTISEMENT

A source briefed on the meetings described them as very
straightforward and businesslike. He said the meetings were an
opportunity for Kloppers to explain the logic of the deal and
to hear Chinese reaction to it.

A state newspaper reported on Tuesday that China's steel
industry, the world's largest, was deeply concerned about the
merger -- which would create the world's biggest mining force,
with control of huge amounts of iron ore, copper, coal,
uranium, diamonds and other commodities for industrial use.

Chinese steel companies fear a merger of the two mining
giants would create "an even bigger monopoly," the China
Metallurgical News quoted an unnamed leader of the China Iron
and Steel Association as saying.

Officials from other major Chinese steel mills, including
Jiangsu Shagang Group, China's fourth-largest steelmaker by
output, also met BHP officials at the Australian firm's
representative office in Shanghai on Wednesday, officials at
Shagang said.

Kloppers, who visited steelmakers in South Korea and Japan
earlier this week, is expected to fly to Beijing on Wednesday
to meet senior Chinese steel industry officials later this
week.

Korean and Japanese steelmakers and Eurofer, the lobby
group for the European steel industry, have also voiced strong
concerns about the proposed all-share takeover -- now valued
around $122 billion.

Eurofer said on Tuesday it would ask the European
Commission to block the merger due to competition concerns.

BHP said on November 8 that it had approached Rio <RIO.AX>,
the world's third-largest miner, with an all-share offer which
Rio was quick to reject as too low.